Dividend from 2003 net income

Telefonica SA
04 May 2004

                            ANTONIO J. ALONSO UREBA

                        Director, General Secretary and

                      Secretary of the Board of Directors

                               TELEFONICA, S.A



Telefonica S.A., in accordance with that stated in article 82 of the Spanish
Stock Market Act (Ley del Mercado de Valores), hereby


                                    NOTIFIES


Pursuant to the resolution adopted by the shareholders of Telefonica, S.A. at
their Annual General Meeting of April 30th, 2004, we hereby inform all
shareholders that on May 14th, 2004 the Company will pay a cash dividend from
2003 net income of a gross amount of 0.20 euros for each Company share issued,
in circulation and carrying entitlement to this dividend. This payment, in
accordance with the applicable tax legislation, will be made as follows:






      Gross dividend       Withholding tax rate (15%)       Net dividend
     (Euros per share)       (Euros per share)           (Euros per share)

         0.20                      0.03                       0.17




The payment of this dividend shall be executed on the aforesaid date by Banco
Bilbao Vizcaya Argentaria, S.A., through the participating entities in Iberclear
(Sociedad de Gestion de los Sistemas de Registro, Compensacion y Liquidacion de
Valores, S.A.), the Spanish securities registrar, clearing and settlement
company.



Madrid, May 3rd, 2004





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